401(k) plans are one of the most common plans available today. A 401(k) plan is an employer-sponsored qualified plan where employees voluntarily elect to contribute a percentage of their annual salary. The advantage these plans have over others is that the employee contributions are made before federal income tax is computed. This creates a tax-deductible means of saving for retirement. In addition, the business may elect to match up to 100% of the employee's contribution further increasing the retirement benefit.

• A 401(k) plan must be established by a business owner
• Employee contributions are taken directly form their salary before taxes are calculated
• Contributions grow tax-deferred until removed
• Businesses may elect to make additional matching contributions based on the employee's deferral
• Matching contributions may require vesting, employee contributions are fully vested
• Loans and hardship withdrawals may be available
• Minimum distributions are required, but may be delayed until retirement

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